Correlation Between Lyxor 1 and Pandora AS
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Pandora AS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lyxor 1 and Pandora AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Pandora AS, you can compare the effects of market volatilities on Lyxor 1 and Pandora AS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lyxor 1 with a short position of Pandora AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Pandora AS.
Diversification Opportunities for Lyxor 1 and Pandora AS
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and Pandora is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Pandora AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pandora AS and Lyxor 1 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lyxor 1 are associated (or correlated) with Pandora AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pandora AS has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Pandora AS go up and down completely randomly.
Pair Corralation between Lyxor 1 and Pandora AS
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 17.53 times less return on investment than Pandora AS. But when comparing it to its historical volatility, Lyxor 1 is 2.16 times less risky than Pandora AS. It trades about 0.02 of its potential returns per unit of risk. Pandora AS is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,429 in Pandora AS on October 13, 2024 and sell it today you would earn a total of 12,196 from holding Pandora AS or generate 224.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lyxor 1 vs. Pandora AS
Performance |
| Timeline |
| Lyxor 1 |
| Pandora AS |
Lyxor 1 and Pandora AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Pandora AS
The main advantage of trading using opposite Lyxor 1 and Pandora AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Pandora AS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Pandora AS will offset losses from the drop in Pandora AS's long position.| Lyxor 1 vs. Lyxor Fed Funds | Lyxor 1 vs. Lyxor BofAML USD | Lyxor 1 vs. Lyxor Index Fund | Lyxor 1 vs. Lyxor 1 TecDAX |
| Pandora AS vs. CALTAGIRONE EDITORE | Pandora AS vs. STEEL DYNAMICS | Pandora AS vs. COSMOSTEEL HLDGS | Pandora AS vs. Sch Environnement SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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